Diesel prices dip, oil back on the rise; Senate tackles highway bill

| 5/9/2005

Diesel prices dipped slightly in the week leading up to May 9, according to the U.S. Department of Energy. However, those lows weren’t expected to stick around as oil prices began to climb with the coming of the summer driving season.

The national average price for diesel fell 3.5 cents to $2.227 per gallon, down from $2.262 the week before. That’s still more than 48 cents higher than prices for the same week in 2004.

California posted the highest average, at $2.518, in spite of falling 4.3 cents from $2.561 the previous week. The rest of the West Coast saw the biggest drop, falling 4.9 cents to $2.481 per gallon.

The smallest drop was in New England, which fell only 2.1 cents to $2.389 per gallon. The East Coast region posted $2.237 per gallon for the week, while the Central and Lower Atlantic regions posted $2.342 per gallon and $2.179 per gallon, respectively.

The lowest average was found in the Midwest, which fell 3.7 cents to $2.157 per gallon.

As for the remaining regions, the Gulf Coast posted a slight drop to $2.173 per gallon, while the Rocky Mountain region came in at $2.318 per gallon.

Those dips were not expected to hold, however, as prices for light, sweet crude rose back up above $50 a barrel on fears that U.S. refineries might not have the capacity to keep up with demand this summer.

On May 9, light, sweet crude was trading at a high of $51.65 per barrel on the New York Mercantile Exchange.

The Organization of Petroleum Exporting Countries has raised its output levels to nearly 30 million barrels a day, but experts say that won’t matter if U.S. oil refineries can’t step up production levels.

One thing that could owner-operators survive the summer driving season is the fuel surcharge provision currently making its way through Congress. The provision was recently approved by the U.S. House as part of its version of the highway bill.

Another version is currently making its way through the Senate and is expected to be open for debate on the Senate floor the week of May 9.

The language in the House bill – HR3 at Section 4139 – requires all motor carriers, brokers and freight forwarders running truckload freight to implement fuel surcharges and pass on 100 percent of those charges to the person who actually pays for the fuel.

The Owner-Operator Independent Drivers Association is urging truckers to fax and call – writing may not be fast enough – their U.S. senators and urge them to include the same fuel surcharge language in the Senate’s version of the bill.

If truckers are uncertain who their senators are, they can contact OOIDA’s Membership Department, and they will look up the information. The toll-free OOIDA number is 1-800-444-5791.

Truckers can also call the U.S. Capitol switchboard at (202) 224-3121, give the operator their ZIP code and be directly connected to their senator’s office.